Good question. All of these loans are over collateralized with other volatile forms of volatile cryptocurrency. The amount of over collateralization varies from platform to platform. Most people use it to go leveraged long. To go leveraged long, one would need to lock an approved volatile coin in the smart contract, then draw out a smaller amount of stablecoins out as debt. Then you would buy more volatile coins with that debt and lock them in the smart contract as well. Rinse repeat until you've reached your desired amount of leverage. I don't do this though, because it's essentially gambling. So, if something terrible happens, like all of the volatile coins drop -50% in a day and they shut down the smart contract so no new loans can be made. You as a stablecoin lender would at least have access to your fair share of volatile coins backing up the system. It's an important risk I should have listed in my other comment, so thanks for asking. The interest rate they pay you for lending fluctuates based on how much demand there is for loans. So right now, it's around 8%. Earlier this year when people were insanely bullish on their volatile coins, it was 16% for a few days. 7-9% is probably where the average has been so far this year.